Can it be stated as a fact, therefore, that UWA had indeed hired the services of the defendant? While the letter states so, the truth
of the matter is that no such contract existed. From the evidence presented to Court, by the time the plaintiff and the defendant
entered into the impugned agreement, the matter between the defendant and UWA was, in the lawyers speak, still subject to contract.
It appears to me that the defendant had been merely declared the best evaluated bidder for the job. Excited by that prospect, the
defendant went ahead to sub-contract the work to the plaintiff. There was nothing definite about the deal. An offer made subject
to contract, and this is where, from the evidence presented to Court, the matter between the defendant and UWA was by the time the
impugned agreement was executed, means that the matter remains in negotiation, and there is no contract until a final contract is
executed. In my view, therefore, the letter exhibited to Court, Exh. P6, cannot by any stretch of imagination pass as evidence of
a contract between the defendant and UWA. To do so would be to further misrepresent facts as they stood at the time. And yet that
is what the parties did in this case, erroneously or otherwise. What happened, in my view, comes within the meaning of common mistake
in law in that at the time of the agreement, the main contract between the defendant and UWA was not in existence and yet both parties
assumed that it was. In law they must be assumed to have been labouring under common mistake. I should add that common mistake is
common in sales of specific goods, where the goods for example, without the knowledge of the seller have perished at the time when
the contract is made. But it may occur otherwise than in connection with the sale of specific goods. This (and the fact that truth
is often stranger than fiction) was the case in Galloway –Vs- Galloway (1914) 30 T.L.R. 531 where the plaintiff and the defendant, each believing that he or she was married to the other, entered into a deed of separation
by which the ‘husband’ was to pay maintenance to the ‘wife’. It then transpired that they had never been married in the first place so the ‘husband’ stopped paying. The ‘wife’ sued him but failed to recover (be awarded) any money due under the deed. The Court held that the separation deed was void
and said that, as a matter of general principle, if the parties to any agreement make a mistake of fact which is both material and
mutual then that agreement is void.
In otherwords, where the mistake is so fundamental, that is, where it goes to the root of the contract, it prevents the formulation
of a true contract and any apparent contract is void (not binding in law) ab initio (from the out set).
Relating the above principles to the instant case, a breach of contract occurs when a party to the contract, without lawful excuse,
(i) fails or refuses to perform the contract; (ii) performs defectively; (iii) incapacitates himself from performing the contract.
See: Law of contract in Uganda by David J. Bakibinga at p. 335.
In the instant case, it is an established fact that there was no contract between the defendant and Uganda Wildlife Authority. In
the erroneous belief that there was one, the parties entered into the impugned contract Agreement. It is submitted by learned counsel
for the defendant that if both the plaintiff and the defendant signed the sub-contract on the basis or strength of the letter of
award issued to the defendant as amounting to a contract between UWA and the defendant, whereas not, then the contract between them
was signed under initial impossibility and mistake based on a false assumption that there existed a contract between the defendant
and UWA. For the reasons I have endeavoured to give above, I accept this submission. There was an obvious mistake as to the existence
of the main contract. Both sides appear to have been having services of lawyers. I have failed to understand why, in the absence
of a contract document between the defendant and UWA, neither party, detected the futility of the subsequent transaction, the impugned
contract herein. Be that as it may, the mistake was operative, that is, it prevented the formation of a true contract. Any apparent
contract based on such false assumption, as the instant agreement, was void. In my fair judgment, existence of a valid contract between
the defendant and UWA was a condition precedent to the formation of a binding sub-contract based on it. Having found that the impugned
contract was signed under initial impossibility and mistake based on the assumption that there existed a contract between the defendant
and UWA, which was false, I’m unable to make a finding that the defendant, without lawful excuse, failed or refused to perform
the contract and therefore is in breach of it. There being no binding contract, the question of its breach does not in my view arise.
I would accordingly answer the first issue in the negative and I do so.
Issue No. 2: Whether the plaintiff is entitled to the reliefs sought:
The plaintiff contends that it has suffered colossal financial loss and damage as a result of the defendant breach. It has particularized
special damages as follows:
1.
Legal fees paid to the plaintiff’s lawyers …………………………
Shs.1,000,000=.
2.
Money paid for the Insurance Guarantee ………………………
Shs.1,470,000=.
3.
Money paid for fuel, oil and service of the motor vehicle used for 2 trips ………………..
Shs.1,196,000=.
4.
Accommodation for 3 persons at Shs.25,000= each for 3 days: Shs.225,000=.
It is argued for the defendant in the alternative, but without prejudice to the main defence of denial of liability, that if the plaintiff
is to some extent entitled to compensation, then the same should be restricted to the insurance guarantee taken out by the plaintiff
and the one million paid to the lawyers for drafting the agreement but not general damages or transport costs to Adjumani. In the
defendant’s view, those were incurred by the plaintiff on their own as they kept moving to the border of Uganda and Sudan for
several other businesses.
There is evidence to show that in pursuit of the impugned contract, the plaintiff incurred expenses particularized as (1) and (2)
above. The general principle is that where the parties are equally at fault, the defendant is in the better position (In pari delicto, portior est condition defendentis). This expresses the general rule applying to otherwise void contracts. Lord Denning made this clear when he said in Ashmore Ltd –Vs- Dawson Ltd [1973] 2 All ER 856:
“I know that Dawsons were parties to the illegality. They knew as well as Mr. Bulmer, that the load was over weight in breach of the
regulations. But in such a situation as this, the defendants are in a better position. In pari delicto, potior est condition defendentis.”
It follows from this that a plaintiff might be able to recover where he could show that he is at fault to a lesser degree than the
defendant. He could show this by proving that he entered into the agreement under a fraudulent misrepresentation. In my view, while
the plaintiff could have exhibited more diligence in the matter, the defendant’s conduct was simply a matter of carelessness
on its part. The plaintiff’s expenses as regards legal fees, Shs.1,000,000=, and money paid for Insurance Guarantee, Shs.1,470,000=
are sufficiently particularized and properly receipted. Now that the contract did not materialize, the justice of the case demands
that the defendant refunds this money. I so order.
As regards expenses (3) and (4), the impugned contract provided that work would start after payment to the plaintiff 75% of the contract
price. Without waiting for the defendant to fulfil that condition, the plaintiff went ahead and allegedly incurred the stated expenses.
I would think that the plaintiff was equally careless when it did that. Accordingly, the two expenses must be disallowed. I do so.
There will therefore be judgment for the plaintiff for Shs.2,470,000= (two million four hundred seventy thousand only) as special
damages with interest at the rate of 20% per annum from the date of filing till payment in full.
The claim based on breach of contract is dismissed. The plaintiff will be entitled to half of the taxed costs. I so order.
Yorokamu Bamwine
J U D G E
25/01/2008
Order: This judgment shall be delivered on my behalf by the Registrar on the due date.
Yorokamu Bamwine
J U D G E
25/01/2008
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